Mr Latham said Prime Minister John Howard had failed to identify any savings to offset the spending, placing inflation and the budget at risk.

Mr Howard yesterday announced many new promises, including a $2.2 billion child-care package, an extra $1 billion in capital grants for schools and $1.3 billion for small business.

"Mr Howard today has confirmed that in this election campaign he has only got one policy - spend, spend, spend," Mr Latham said. "This is the mother of all clearance sales - everything goes."

The Coalition announced new spending plans costing $52 billion in the May 11 budget. Since then it has announced more policies totalling $14 billion - $6 billion of it yesterday - bringing the total to about $66 billion. That compares with Coalition spending of about $25 billion before the last election.

Federal Treasury's pre-election budget update, released this month, predicted total surpluses for the next four years of $25 billion, thanks to a company and income tax windfall. The prediction was more than double the $11.2 billion four-year surplus announced in the May budget.

But much of the Coalition's election spending plans were already factored into the bottom line, still leaving a big surplus for more policies.

Mr Howard claims the big surplus is the dividend of economic strength that only it can deliver, allowing it to provide better services.

Mr Latham said Mr Howard had failed to address crucial problems including tax breaks for people earning less than $52,000 and the crisis in public hospitals.

The biggest threat posed by the plans was to Australia's economic fundamentals, most specifically to the nation's interest rates, he said.

Market economists and academics are warning both sides not to engage in reckless spending, warning that the funds could be necessary for a rainy day.

Labor has so far announced policies costing more than $20 billion, but this has been almost entirely offset by savings measures.

"The Government here is trying to defy economic gravity," Mr Latham said. "It's not good economic policy, it's all about politics."

Mr Latham dismissed suggestions that the Coalition had outbid Labor, saying the election was not a bidding war. He was critical of the $2.2 billion child-care rebate package, because it failed to provide more long-day-care places.